Topics

Obamacare’s Catch-22

Insurers seek a break from rules that govern their spending.

WASHINGTON - AUGUST 16: The U.S. Department of Health and Human Services building is shown August 16, 2006 in Washington, DC. The HHS Building, also known as the Hubert H. Humphrey Building, is located at the foot of Capitol Hill and is named for Humphrey, who served as a U.S. senator from Minnesota and Vice President of the United States. (Photo by Mark Wilson/Getty Images)

In­surers will ask the White House for some re­lief from those rules, an in­dustry source said, in light of the un­ex­pec­ted costs they had to shoulder be­cause of Health­Care.gov.

The re­quest is still pre­lim­in­ary. In­surers haven’t yet tried to es­tim­ate how much the web­site’s prob­lems cost them, mostly be­cause they’re still fo­cused on try­ing to get people in the door and to work through the re­main­ing kinks in the sys­tem.

But the core ar­gu­ment is already there: In­surers don’t think it’s fair to pen­al­ize them for ex­penses they in­curred solely be­cause of the gov­ern­ment’s broken web­site or the ad­min­is­tra­tion’s last-minute policy changes.

In­surers can af­ford the ex­tra lo­gist­ic­al costs, to be sure. But they’re be­ing saddled with un­ex­pec­ted costs to im­ple­ment a law that caps their ad­min­is­trat­ive costs. The Af­ford­able Care Act says in­di­vidu­al policies can spend only 20 per­cent of their premi­ums on over­head and profit. If they spend more, they have to re­bate the dif­fer­ence to their cus­tom­ers.

Some plans worry they’ll go over the lim­it this year be­cause of the ex­tra ad­min­is­trat­ive costs the ad­min­is­tra­tion has dumped on them since Oc­to­ber.

And al­though they haven’t put a dol­lar es­tim­ate on it yet, they’re con­fid­ent this will be rather ex­pens­ive for them once it’s all said and done.

Be­cause Health­Care.gov didn’t work when it launched in Oc­to­ber, in­surers set up new work-arounds to en­roll people dir­ectly. They spent — and are still spend­ing — a lot of money to straight­en out flawed en­roll­ment files sent to them from Health­Care.gov. Last-minute changes in the im­ple­ment­a­tion — en­cour­aging in­surers to un-can­cel cer­tain policies, giv­ing con­sumers more time to pay their premi­ums, etc. — have also come with ad­ded ad­min­is­trat­ive costs.

Cut­ting in­surers some slack on the spend­ing caps might be an easy way for the White House to mend its frayed re­la­tion­ship with the in­dustry. Al­though in­surers and the White House have the same goals — get people, es­pe­cially healthy people, en­rolled through the law’s new mar­ket­places — in­surers have been con­sist­ently frus­trated by policy changes that squeeze them to com­pensate for the web­site’s woes.

On the oth­er hand, though, the White House would be soften­ing a part of the health care law that it has tried hard to sell polit­ic­ally. Pres­id­ent Obama has high­lighted the re­bates from in­surers — com­pan­ies is­sued some $500 mil­lion in re­bates last year — as a pop­u­lar de­vel­op­ment people might not re­cog­nize is a res­ult of Obama­care.

The House has completed it's business for 2016 by passing a spending bill which will keep the government funded through April 28. The final vote tally was 326-96. The bill's standing in the Senate is a bit tenuous at the moment, as a trio of Democratic Senators have pledged to block the bill unless coal miners get a permanent extension on retirement and health benefits. The government runs out of money on Friday night.

HEADS TO OBAMA

Senate Approves Defense Bill

19 hours ago

THE LATEST

The Senate passed the National Defense Authorization Act today, sending the $618 billion measure to President Obama. The president vetoed the defense authorization bill a year ago, but both houses could override his disapproval this time around.

Source:

ANTI-MINIMUM WAGE INCREASE

Trump Chooses Hardee’s/Carl’s Jr CEO as Labor Sec

21 hours ago

BREAKING

BUCKING THE BOSS?

Trump Cabinet Full of TPP Supporters

21 hours ago

WHY WE CARE

"President-elect Donald Trump railed against the Trans-Pacific Partnership on his way to winning the White House and has vowed immediately to withdraw the U.S. from the 12-nation accord. Several of his cabinet picks and other early nominees to top posts, however, have endorsed or spoken favorably about the trade pact, including Iowa Gov. Terry Branstad, announced Wednesday as Mr. Trump’s pick for ambassador to China, and retired Marine Gen. James Mattis, Mr. Trump’s pick to head the Department of Defense."